nep-reg New Economics Papers
on Regulation
Issue of 2005‒06‒27
sixteen papers chosen by
Christian Calmes
Université du Québec en Outaouais, Canada
  1. Political renegotiation of regulatory contracts By Cecile Aubert; Jean- Jacques Laffont
  2. The Optimal Amount of Falsified Testimony By Winand Emons; Claude Fluet
  3. Determinants of Vertical Integration: Finance, Contracts, and Regulation By Daron Acemoglu; Simon Johnson; Todd Mitton
  4. The Management of Digital Rights in Pay TV By Campbell Cowie; Sandeep Kapur
  5. Acquisition and disclosure of genetic information under alternative policy regimes By Deborah Wilson
  6. The EU's Schizophrenic Constitutional Debate: Vertical and Horizontal Decentralism in European Governance By Stijn Smismans
  7. Torn between Reform and Stagnation: An Institutionalist Analysis of the MEDA Programme By Stephan Stetter
  8. Institution-Driven Competition: The Regulation of Cross-Border Broadcasting in the EU By Alison Harcourt
  9. Integration in Tension in Immigration Law: Mirror and Catalyst of the Inherent Paradox of the Nation-States By Helene Oger
  10. The Strengthening of the Commission Competences by the Constitutional Treaty and the Principle of Balance of Power By Eva Nieto Garrido
  11. Difference as a Potential for European Constitution-Making By Christine Landfried
  12. EU Conditionality and Minority Rights: Translating the Copenhagen Criterion into Policy By Gwendolyn Sasse
  13. Media Pluralism: European Regulatory Policies and the Case of Central Europe By Beata Klimkiewicz
  14. Economic Instruments and Induced Innovation: The Case of End-of-Life Vehicles European Policies By Massimiliano Mazzanti; Roberto Zoboli
  15. Reform of the Japanese Banking System By Masahiro Kawai
  16. The benefits of liberalising product markets and reducing barriers to international trade and investment: the case of the United States and the European Union By OECD Economics Department
  1. By: Cecile Aubert (Universite Paris Dauphine, Eurisco); Jean- Jacques Laffont (IDEI, Toulouse)
    Abstract: Governmental contracts may be renegotiated after political changes. Current governments can anticipate this and strategically distort contracts to influence renegotiation outcomes. In this sequential common agency game, the initial contract impacts elements of the renegotiation process: outside options (a `leverage' effect), and the beliefs of the new government through partial information revelation (a `strategic' effect). We characterize the optimal initial contract, as a function of political stability, time preference, and profits appropriation by the initial government. It always entails either full separation or strategic, partial, information revelation. Last, institutional rules imposing immediate payments to the firm help limit output distortions.
    Keywords: Renegotiation, Political uncertainty, Regulation.
    JEL: D82 L51 D73
    Date: 2005–06–15
    URL: http://d.repec.org/n?u=RePEc:wpa:wuwpga:0506002&r=reg
  2. By: Winand Emons; Claude Fluet
    Abstract: An arbiter can decide a case on the basis of his priors or he can ask for further evidence from the two parties to the conflict. The parties may misrepresent evidence in their favor at a cost. The arbiter is concerned about accuracy and low procedural costs. When both parties testify, each of them distorts the evidence less than when they testify alone. When the fixed cost of testifying is low, the arbiter hears both, for intermediate values one, and for high values no party at all. The ability to commit to an adjudication scheme makes it more likely that the arbiter requires evidence.
    Keywords: Evidence production, procedure, costly state falsification, adversarial, inquisitorial
    JEL: D82 K41 K42
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:lvl:lacicr:0520&r=reg
  3. By: Daron Acemoglu; Simon Johnson; Todd Mitton
    Abstract: We study the determinants of vertical integration in a new dataset of over 750,000 firms from 93 countries. Existing evidence suggests the presence of large cross-country differences in the organization of firms, which may be related to differences in financial development, contracting costs or regulation. We find cross-country correlations between vertical integration on the one hand and financial development, contracting costs, and entry barriers on the other that are consistent with these "priors". Nevertheless, we also show that these correlations are almost entirely driven by industrial composition; countries with more limited financial development, higher contracting costs or greater entry barriers are concentrated in industries with a high propensity for vertical integration. Once we control for differences in industrial composition, none of these factors are correlated with average vertical integration. However, we also find a relatively robust differential effect of financial development across industries; countries with less-developed financial markets are significantly more integrated in industries that are more human capital or technology intensive.
    JEL: G30 G34 L22 L23
    Date: 2005–06
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:11424&r=reg
  4. By: Campbell Cowie; Sandeep Kapur (School of Economics, Mathematics & Statistics, Birkbeck College)
    Abstract: Successful roll-out of Digital Rights Management (DRM) solutions has the potential to transform the economics of pay television. This paper explains how a technology that is being developed as a potential solution to the challenge posed by the widespread theft of intellectual property (piracy) may ultimately support the development of new business models. These new business models could trigger a radical change in the sources of market power in the supply chain, increasing the bargaining power of content companies relative to vertically integrated platform operators. The paper examines some of the regulatory challenges that the new business models and the new technology raise
    Keywords: Digital rights management, pay television, competition
    JEL: L1 L5 L82
    Date: 2005–06
    URL: http://d.repec.org/n?u=RePEc:bbk:bbkefp:0510&r=reg
  5. By: Deborah Wilson
    Abstract: A current policy issue is whether, and if so under what circumstances, insurance companies should be given access to genetic test results. The insurance industry argues for mandatory disclosure in order to avoid problems of adverse selection; genetic interest groups argue for a moratorium or legislation preventing such disclosure; a third option would be a voluntary consent law. The purpose of this paper is to investigate the impact of alternative policies on individuals’ incentives to both acquire genetic information and to disclose it to insurers. The theoretical framework used to inform this analysis is provided by the ‘games of persuasion’ literature, in which one agent tries to influence another agent’s decision by selectively withholding her private information regarding quality. The application of the theoretical framework to this policy context yields surprising results. Individuals have the incentive to acquire genetic information and to disclose the test results if disclosure is voluntary. If, however, they are obliged to disclose the results of any genetic tests they have taken, their incentive may be not to acquire such information. I discuss the policy implications of these findings both from the point of view of the insurance industry and from a public health perspective.
    Keywords: Genetic Information, Disclosure, Insurance
    JEL: D8 I1
    Date: 2005
    URL: http://d.repec.org/n?u=RePEc:bri:cmpowp:05/118&r=reg
  6. By: Stijn Smismans
    Keywords: governance; constitution building; decentralisation
    Date: 2004–12–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0147&r=reg
  7. By: Stephan Stetter
    Keywords: Mediterranean; implementation; institutionalism; political science
    Date: 2004–12–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0149&r=reg
  8. By: Alison Harcourt
    Keywords: regulatory competition; media
    Date: 2004–12–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0150&r=reg
  9. By: Helene Oger
    Keywords: immigration policy; law
    Date: 2005–02–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0151&r=reg
  10. By: Eva Nieto Garrido
    Keywords: European Commission; Constitution for Europe; institutions
    Date: 2005–02–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0152&r=reg
  11. By: Christine Landfried
    Keywords: European Convention; Constitution for Europe; governance; integration theory
    Date: 2005–02–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0153&r=reg
  12. By: Gwendolyn Sasse
    Keywords: Hungary; Slovakia; Romania; Copenhagen criteria; minorities
    Date: 2005–03–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0154&r=reg
  13. By: Beata Klimkiewicz
    Keywords: media; Poland; Czech Republic; Slovakia; regulatory politics
    Date: 2005–05–15
    URL: http://d.repec.org/n?u=RePEc:erp:euirsc:p0156&r=reg
  14. By: Massimiliano Mazzanti (University of Ferrara); Roberto Zoboli (CERIS-DSE, National Research Council of Italy)
    Abstract: The paper addresses the dynamic-incentive effect of environmental policy instruments when innovation is uncertain and occurs in very complex industrial subsystems. The case of end-of-life vehicles (ELVs) is considered focusing predominantly on the effects of the European Directive adopted in 2000 which stipulated economic instruments as free take-back, and on the voluntary agreements in place in many EU countries. The ELV case study is an example of a framework where policy-making faces an intrinsic dynamic and systemic environment. Coherent sequences of single innovations taking place in both upstream (car making) and downstream (car recycling/recovery) of the ELV system can give rise to different “innovation paths”, in accordance with cost-benefit considerations, technological options and capabilities associated to the different industrial actors involved. The impact of economic instruments on innovation paths, in particular free take-back, is considered. Deficiencies or difficulties concerning the transmission of incentives between different industries can prevent the creation of new recycling/recovery/reuse markets, giving rise to other less preferable and unexpected outcomes. The implication for policy is a need for an integrated policy approach, as enforceable VAs, in order to create a shared interindustry interest for innovation and to reduce the possible adverse effects which economic instruments exert on innovation through cost benefit impacts on key industrial and waste-related agents involved in the ELV management system. These advantages should be taken into account vis à vis the emergence of Integrated Product Policy (IPP) as a leading concept of EU environmental policy and the associated shift from "extended producer responsibility" to "extended product responsibility".
    Keywords: ELV, Induced innovation, Dynamic efficiency, Economic instruments, Recycling
    JEL: L62 O13 O31 O38
    Date: 2005–05
    URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2005.80&r=reg
  15. By: Masahiro Kawai
    Abstract: Japan has experienced a decade-long economic stagnation with a distressed banking sector in the 1990s. The absence of a credit culture to rigorously assess and price credit risks of borrowers, aggravated by weak prudential and supervisory frameworks, in the 1980s, the collapse of the asset price bubble in the early 1990s, and the lack of decisive, comprehensive strategy to address the banking sector problem at an early stage were largely responsible for the emergence of banking sector problems. All of these allowed a systemic banking crisis to emerge in 1997-98 and a large output loss during 1998-2002. The crisis ultimately prompted the government to take a more aggressive policy to tackle the problem. Sufficient progress has been made since then on banking sector stabilization, restructuring, and consolidation. The regulatory and supervisory framework has been strengthened in a way consistent with an increasingly market-oriented, globalized environment. As a result, the worst is over in the Japanese banking system, setting the stage for sustained economic recovery. Though bank capital may still be inadequate, safety nets are in place, the credit allocation has been made more rational. Remaining risks are limited to regional and smaller institutions that are vulnerable to weak, local economic conditions and hikes of the long-term interest rate.
    Keywords: Asset price bubble, Japan's "lost decade", systemic banking sector crisis, bank restructuring and consolidation, market-based regulatory and supervisory framework
    JEL: E44 E51 G21 G28
    Date: 2005–06
    URL: http://d.repec.org/n?u=RePEc:hst:hstdps:d05-102&r=reg
  16. By: OECD Economics Department
    Abstract: This paper provides an assessment of the impact of a package of structural reforms in the European Union and the United States on long-run trade and output gains accruing to OECD countries. The package includes reforms that reduce competition-restraining regulations, cut tariff barriers and ease restrictions on foreign direct investment to "best practice" levels in the OECD area. The analysis, which is based on earlier OECD studies, indicates that such reforms could lead to gains in GDP per capita in both transatlantic areas of up to 3 to 3 ½ per cent. Moreover, due to trade linkages, the benefits of reforms in the United States and the European Union would spread to other OECD countries, with an estimated increase in GDP per capita of up to 1½ per cent. As the analysis is confined to a relatively narrow set of policies and abstracts from potential dynamic effects from reform-induced increase in innovation, the overall gains from broad reforms could be significantly higher than reported in the paper. <p> Les bénéfices de la libéralisation des marchés de produits et de la réduction des barrières aux échanges et aux investissements internationaux: le cas des Etats-Unis et de l'Union européenne <p> Ce document offre une évaluation des réformes globales structurelles en Europe et aux États-Unis sur les échanges et la croissance de long terme dans les pays de l'OCDE. Ces réformes incluent l'ensemble des mesures politiques visant la réduction de la réglementation anti-compétitive, la baisse des barrières tarifaires et des restrictions sur les investissements directs étrangers vers les "meilleures pratiques" observées au sein des pays de l'OCDE. L'analyse, qui s'appuie sur de précédents travaux de l'OCDE, montre que de telles réformes peuvent conduire à une augmentation du PIB par habitant entre 3 et 3½ pour cent. De plus, en raison d'effets de transmission via les échanges, le bénéfice des réformes en Europe et aux États-Unis devrait se répandre à l'ensemble des autres pays de l'OCDE conduisant à une augmentation du PIB moyen par habitant de plus de 1½ pour cent. Étant donné que l'analyse ne couvre qu'un nombre de mesures spécifiques et exclut les effets dynamiques potentiels de l'innovation, les bénéfices tirés d'un ensemble de réformes beaucoup plus large pourraient bien être plus élevés que ceux reportés dans ce document.
    Keywords: international trade; foreign direct investment; regulation; growth and productivity;United States; European Union
    JEL: F13 F21 K2 O4
    Date: 2005–06–07
    URL: http://d.repec.org/n?u=RePEc:oed:oecdec:432&r=reg
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